4 reasons why UK TV has entered a ‘renaissance’ period

The Drum has picked out four key themes for TV advertisers to digest

TV advertising is going through a “renaissance,” according to Matt Hill, director of research and planning at Thinkbox, the sector’s industry body. He pointed to a “surging” e-commerce sector, which is injecting cash, as well as the growth of subscription video (SVOD) and ad-funded video (AVOD) consumption as reasons for excitement this year.

Speaking at Thinkbox’s TV in Focus 2022 event, Thinkbox’s Matt Hill gave a ‘state of the nation-style’ address where he credited the shortening of AB deadlines and advancements in addressable tech as reasons why the medium has become more desirable to advertisers.

But what should the TV ad market come to expect from 2022? The Drum has picked out four key themes for TV advertisers to digest.

Shortened AB deadlines are here to stay

A major positive for advertisers, inspired by the pandemic, was a shortening of AB deadlines – something the ad industry has been asking media owners to do for years. That’s the speed at which advertisers can deliver an ad on the air, and they’ve historically been slow. The downside to shorter AB deadlines, however, is that it has made the market more volatile, leading to inflation.

Kate Waters, director of client strategy and planning at ITV, says: “Shortened AB times are here to stay. We made a decision during the pandemic that we would do what advertisers needed at that time.” But she admits that shorter deadlines are tricky to manage internally at ITV as they have limited oversight of where the revenue is coming from.

“What we need to do as an industry, if we are all happy to accept we want more flexibility, is to try and find a way to manage that volatility,” Waters says. “It’s a new skill we are going to need to develop to learn and pass on that knowledge to mitigate volatility.”

She calls on the industry to come to ITV, knowledge share and ask questions to solve the issue.

Is the love affair with streaming over?

Ian Whittaker, founder of consultancy firm Liberty Sky Advisors, argues that the “market is becoming more and more skeptical in the future of the subscriber model.” According to Whittaker, “the major players have made a very wrong move jumping into subscription models. They’ve now locked themselves into a battle where it will be very hard to extract themselves.”

That was said one day before ITV launched ITVX, its dual-tier streaming service incorporating SVOD and AVOD.

Whittaker references the US’s SVOD saturation figure, which stands at 80% (around 75% in the UK), and compares it to the growing AVOD market. Whittaker’s data showed the ad-supported sector grew by 18% in Q4 2021, up from 8% in Q4 2020. The shift to ad-supported is demonstrated by the likes of Peacock, Discovery+ and Paramount launching ad-funded options to their streamers.

He also warns the broadcasters not to devote time to developing SVOD services, calling ITV’s and BBC’s joint venture BritBox a “distraction.”

“The future of AVOD looks very attractive, but when it comes to SVOD things are looking a lot less attractive,” he says.

Will the e-commerce bubble burst?

According to Thinkbox research, online-only services now account for 20% of linear TV advertising and are the biggest spender, accounting for over £1bn in TV spend. Online used car sites are relatively new into the TV space, spending 222% (+£51) more on TV advertising in 2021 compared with 2019.

Richard Kirk, chief strategy officer at media buyer Zenith, says e-commerce’s cash injection into TV advertising is likely to be sustained. According to Kirk, the web-first platforms will continue to “disrupt categories and continue to get cheaper access to cash” and they all “still see TV as an effective medium for them.” He adds that the competitiveness of the e-commerce sector is bringing more brands to TV as they see their competitors with TV ads.

“If you are selling a new category there is only so much you can do with performance marketing. If you are selling a brand and a concept the best way to do that is still through a brand-safe channel on a screen that everyone’s sofas are pointed at,” adds Gareth George, group head of media at RVU.

C-Flight is nearly here...

C-Flight, the broadcasters’ joint linear and BVOD measurement tool, is finally ready. It’s been much clamored for by an industry fed up comparing apples and oranges between linear, VOD and online video.

Giving an update, Hill says the solution is now operational and is in the final testing services.

“I’m very hopeful that we will get C-Flight reports rolled out by the end of this month,” he says. “C-Flight is coming, it’s around the corner.”

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